The debt hoax ...

[ref]

Not really. That would imply that before SWIFT, banks could not transfer money between each other (at least, not without loading it onto the truck first). What is germane is understanding that banks send each other information and, as a result, make changes to account balances.

Btw, this is the first time ever I hear a word "germane". I had to look it up from the dictionary. With me it associates with Germany.

But I agree, you put it simply. I just talked about the present situation and systems. I have made a good deal of work-related transactions, and there have been numerous half-joking queries of "could you just send 1 million to my account?" from friends. But knowing that with these systems in place you couldn't get far, no sane person would try to do that.

 

[psionl0]

Is runs on banks impossible these days? Because most money is electronic! To get actual cash is time-consuming. So in practice maybe runs on banks cannot happen.

Bank runs are still very much possible these days. However, they probably wouldn't resemble the "It's a wonderful life" scene where angry mobs are crowding the bank building. In this electronic era, a bank run could happen much more suddenly.

If I transfer $100 from an account in bank A to an account in bank B then bank A has to transfer $100 of reserves to bank B. If too many people do this then bank A will run out of reserves and an electronic bank run has occurred.

Of course, a bank run is not very likely to happen unless economic conditions become much more desperate. Government policy is to bail out banks that get themselves into trouble.

 

[Anders Lindman]

Bank runs are still very much possible these days. However, they probably wouldn't resemble the "It's a wonderful life" scene where angry mobs are crowding the bank building. In this electronic era, a bank run could happen much more suddenly.

If I transfer $100 from an account in bank A to an account in bank B then bank A has to transfer $100 of reserves to bank B. If too many people do this then bank A will run out of reserves and an electronic bank run has occurred.

Of course, a bank run is not very likely to happen unless economic conditions become much more desperate. Government policy is to bail out banks that get themselves into trouble.

Yes, I realized that today a run on a bank can happen even faster than in the past by customers removing their money via the Internet unless the bank shuts down their website before that happens.

 

[Jrrarglblarg]

Yes, I realized that today a run on a bank can happen even faster than in the past by customers removing their money via the Internet unless the bank shuts down their website before that happens.

... unless they attempt to pull their money out and put in paypal accounts instead. That would be the worlds SLOWEST run on the banks. Three days? Maybe 5?